Tuesday, March 31, 2009

2008 Effective Tax Rate



Here we are at the end of March, and my household's income taxes are done and delivered. In fact, I received my state tax refund long ago — and no, it wasn't an IOU.

One calculation I like to do each year: our effective tax rate. Forget all the complicated tax brackets, deductions, credits, and accounting hocus-pocus. In the end, how much income tax did we pay, overall, when compared to our gross income? That's what our effective tax rate tells us.

Here's where we came out:

Our 2008 Effective Tax Rate


For comparison purposes, our 2007 effective tax rate showed up at 13 percent.

Our nearly-four-percent increase can be attributed to our focus on debt paydown and emergency-fund saving, rather than contributions to tax-saving accounts like 529 plans and IRAs.

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— Posted by Michael @ 8:10 AM








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Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


100%

Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]

100%

Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]